The $190 million hacking shocked the community and proved Vitalik’s “I told you so.” But seldom noticed the following arbitrages’ double damage.
EigenPhi is the first to report the humongous transactions done by searchers, and we made a thread to reveal the related transactions, liquidity pools, #MEV 🤖, contracts, and tokens.
Here we will lead you through the key elements of the whole process.
In block 15259101,
After the initial hacking, the hacker swapped 100 WBTC for 1084 WETH via this transaction in this Uniswap V2 liquidity pool. The swap moved the price of WETH/WBTC to 10.84, while the price on Binance was 14.27 WETH per WBTC.
A few seconds later, another exploiter swapped 100 WBTC for WETH again via this transaction in the same pool, which moved the price of WETH/WBTC down again to 6.76, while the price on Binance was still 14.27 WETH per WBTC.
The huge exchange rate spread of WETH/WBTC created a once-in-a-lifetime arbitrage window. A flash boy saw the opportunity and started an arbitrage to exchange the assets between the unbalanced LP and another Uniswap v3 LP, using contract 0x00f92100f5008a00de00f3aec900cd0b836d00a0. As a result, he earned 86.7 WETH, worth $140K from the deal, though he had to pay the miner 645 WETH as tips, worth about $1.05M, the biggest miner tips we have ever seen.
These 3 transactions can be seen here in the picture below, and the tragedy continued.
Ten minutes later, in block 15259200, another 3 transactions also joined the bustle.
The hacker swapped 300 WBTC for 2,224 WETH in the mentioned Uniswap V2 liquidity pool via this transaction. The colossal inflow unbalanced the liquidity pool’s assets again and generated an unbelievable arbitrage window, which moved the price of WETH regarding WBTC to 7.4, while the price on Binance was 14.27 WETH per WBTC.
Next, the person behind the address 0xb8ef267283e0a11a2cb7bdb4c1667b9c7e3a6e9f noticed the exchange rate spread. This guy started this transaction to swap WETH and WBTC between the Uniswap V2 pool and the Uniswap V3 pool we mentioned, eventually raking about 1,967 WETH as profit using the MEV-BOT contract: 0xbadc0defafcf6d4239bdf0b66da4d7bd36fcf05a. The profit of this arbitrage is about $3.2 million.
Another trader behind the address 0x6f951fb2b7d8ae795571b942b134ed3c4819e796 sensed something and used the same contract to make money. The arbitrage brought this guy about $9.6K as profit with the cost of $1.1K.
All the above 3 transactions are illustrated in the picture below:
Following the big hack comes significant arbitrage opportunities. And some guys benefited A LOT from them. The transactions we mentioned above are just some of them. In total, we estimate about $6 million has been taken out from the hacking as revenue for the searchers, out of which $4.5 million was possible profit. These searches must have either some highly sophisticated systems monitoring all the liquidity pools or clairvoyant power foreseeing the future. What else?
This analysis of the arbitrages following the hack is just the beginning. Please follow us for more. And please let me know if you are interested in the tool that generated the flow charts above.
Follow us via these to dig more hidden wisdom of DeFi: